Moody's assigns to Iris

Moody's Investors Service said it assigned a B3 corporate family rating and B3-PD probability of default rating to Iris Holdings, Inc. Moody's also gave a Ba3 senior secured rating to Iris' $250 million revolving asset-based lending facility expiring in 2027, a B2 rating to the planned senior secured $1.5 billion first-lien term loan due 2028 and a Caa2 senior unsecured rating to the proposed $400 million senior unsecured notes due 2028. The outlook is stable.

Iris is a new acquisition vehicle formed by Clearlake Capital Group LP to take Intertape Polymer Group Inc. private in a leveraged buyout. Clearlake will $1.9 billion in debt and $909 million in equity for the deal. Following the change of control, IPG’s debt will be repaid, and the corresponding ratings withdrawn, the agency said.

"Pro forma starting leverage for the Clearlake transaction is very high at around 9x," said Whitney Leavens, a Moody's analyst, in a press release.

"We expect EBITDA growth to support deleveraging toward 7x through 2022, but governance risks will remain heightened given the aggressive financial policy."

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